BIRKENSTOCK ORTHOPAEDIE GMBH AND CO.

KG (formerly BIRKENSTOCKORTHOPAEDIE GMBH), v.PHILIPPINE SHOE EXPO MARKETING CORPORATIONG.R. No.194307 promulgated on November 20, 2013.Birkenstock Orthopaedie GMBH (Birkenstock Orthopaedie) applied for the trademark registrationof BIRKENSTOCK with the IPO. Philippine Shoe Expo opposed the application on account ofprior use for more than 16 years and registration of the mark BIRKENSTOCK AND DEVICE. TheBureau of legal Affairs (BLA) sustained the opposition because: (i) the competing marks areconfusingly similar and are used on the same and related goods; (ii) Birkenstock Orthopaediefailed to prove actual use of the mark in trade and business in the Philippines; (iii) prior right overthe mark was not lost even though the registration of BIRKENSTOCK AND DEVICE wascancelled, as there was proof of the marks continuous and uninterrupted use in commerce in thePhilippines; and (iv) BIRKENSTOCK is not well -known in the Philippines and internationally. TheIPO Director General set aside the BLAs ruling. The IPO Director General found BirkenstockOrthopaedie to be the true and lawful owner and prior user of the BIRKENSTOCK marks. TheIPO Director General further held that BIRKENSTOCK AND DEVICE is no longer an impedimentto the registration of BIRKENSTOCK as the formers registration had been cancelled on accountof the registrants failure to file the 10th year Declaration of Use. The Court of Appeals reinstatedthe decision of the BLA.

The Supreme Court ruled in favor of Birkenstock Orthopaedie for the following reasons: (i) underthe former trademark law, Republic Act 166, failure to file the Declaration of Use results in theautomatic cancellation of the trademark which in turn is tantamount to the abandonment orwithdrawal of the registrants right or interest over the trade mark. Applying this rule, theregistrant is deemed to have abandoned its right or interest over the mark BIRKENSTOCK ANDDEVICE on account of its failure to file the 10th year Declaration of Use; and (ii) BirkenstockOrthopaedie proved its true and lawful ownership of the mark Birkenstock. Evidence wassubmitted on (i) the use of the mark in Europe since 1774, when its inventor, Johann Birkenstock,used the mark on his line of quality footwear, which use was continued by numerous generationsof his kin; and (ii) the worldwide registration of the mark BIRKENSTOCK. The Supreme Courtdid not find credible the evidence of Philippine Shoe Expo as it was able to submit only copies ofsales invoices and advertisements, which showed merely its transactions involving the same.The Supreme Court found the registration of BIRKENSTOCK AND DEVICE to have been done inbad faith and found it highly incredible that Philippine Shoe Expo came up on its own with themark BIRKENSTOCK, obviously of German origin and a highly distinct and arbitrary mark. TheSupreme Court pointed out that Philippine Shoe Expo obviously knew of the existence ofBIRKENSTOCK and its use by Birkenstock Orthopaedie and that it clearly intended to takeadvantage of the goodwill generated by the BIRKENSTOCK mark.Finally, the Supreme Court reiterated the principle that registration of the trademark merelycreates a prima facie presumption of ownership which yields to superior evidence of actual andreal ownership of a trademark. In the words of the Supreme Court:Clearly, it is not the application or registration of a trademark that vests ownership thereof, butit is the ownership of a trademark that confers the right to register the same. A trademark is anindustrial property over which its owner is entitled to property rightswhich cannot beappropriated by unscrupulous entities that, in one way or another, happen to register suchtrademark ahead of its true and lawful owner. The presumption of ownership accorded to aregistrant must then necessarily yield to superior evidence of actual and real ownership of atrademark.The cancellation of the trademark registration due to failure to file the Declaration of Use istantamount to a waiver of the registrants right or interest over the trademark and thus, will notpreclude another partys subsequent application of the mark. And, a trademark registration

merely creates a prima facie presumption of ownership which yields to superior evidence ofactual and real ownership of a trademark.